How to Turn a Car Title Over to a Spouse in Divorce

By Rob Jennings J.D.

When a couple separates, they must separate their personal lives, their finances and their property. During marriage, spouses often borrow money in both names to purchase automobiles that they title jointly. Unless you want your soon-to-be-ex-spouse driving around indefinitely in a car with your name on it, make sure to get the title changed over as part of the divorce process.

Division of Assets

Although property division law varies by state, certain assets that can't be divided -- such as a car -- can be kept by one spouse or the other. If your spouse keeps a car as part of a property division, she'll typically have to compensate you for your interest in the vehicle with cash or a similarly valuable asset. This will vary depending upon how your property is divided; not all states require an equal division of assets. In some cases, a vehicle can be more of a debt than an asset. Courts value assets like cars by subtracting any outstanding loan balance from the fair market value of the vehicle. If more is owed than the car is worth, the negative equity will be distributed like a debt.

Transferring Title

The nuts and bolts of actually signing over the car can be as simple as appearing in front of a notary public and transferring your interest by signing on the correct line on the vehicle's title. The title is then turned in, along with the license plates, at your local Division of Motor Vehicles office. A new registration in your spouse's name is generated and she either receives new plates or is allowed to transfer the existing plate into her name.

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The Loan

If money is still owed on the car, signing the title may require appearing at the local branch of your lender or completing other lender paperwork required to transfer title. As part of your divorce settlement, you should also insist that your spouse refinance any outstanding loan into her name solely. Even if she receives the car in the divorce and agrees to be responsible for the payments, the lender can still hold you responsible as long as your name remains on the loan.

Failure to Transfer Title

Failure to sign over title to the vehicle can result in contempt of court charges for court-ordered awards or a lawsuit for breach of contract if you have a settlement agreement. Getting your name off of somebody else's car title, though, should be one of your first priorities. As long as the vehicle remains in your name, whether in whole or in part, you could be held civilly liable if it's involved in an at-fault accident. If your spouse allowed the insurance to lapse, your assets might constitute the only source of compensation for the victim.

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Can I Still Be Held Responsible for a Vehicle My Wife Won in the Divorce?

References

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